Linked by Thom Holwerda on Tue 14th Aug 2012 15:36 UTC
Windows "According to an inside source, a session was held at Microsoft's recent TechReady15 conference in which all the launch details were laid out. If things go according to the plan detailed then, the Surface for Windows RT tablet will be launching October 26th - no surprise there - at a compelling price of $199." My wallet just squealed in pure bliss.
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Dumb Move
by galvanash on Tue 14th Aug 2012 19:39 UTC
galvanash
Member since:
2006-01-25

I said it when they announced this thing... They should price it identically to the iPad if they they are serious about being a long term competitor. They are making the same mistake that everyone else makes when trying to compete with Apple...

They should be trying to make a better product at the same price (so they can, you know, actually make some money on it). If they don't feel they have a better product yet they should go back and spend some money and improve it until they feel it is a better product. They won't get a second chance with this.

I have to say that personally I think the product has potential. It has some very compelling and creative features and if they get some developer love they might be able to make a dent in the table market with it.

But...

Pricing it at $199? They just make it look like a cheap wannabe. Sure it will put the product in more hands faster (which definitely affects developer confidence positively), but as a developer that pricing does not give me any sense that they have confidence in it. It makes it feel like an experiment, i.e. "lets give it away and see if it sticks"... Why should I bother with that?

Part of the reason that developers flock to Apple devices is that they are not cheap. Apple makes gobs of money - no one is seriously worried about the product being dropped any time soon. How long will Microsoft bankroll a product when they lose money on every sale? Will it ever be popular enough that they can actually increase the price (or decrease the costs) enough that the question of its continued existence goes away? Do I want to try and market my software to the "I really wanted an iPad, but this was cheaper" demographic???

On top of that, pricing it to make a profit on it would have at least given their OEMs a small sense of hope. They could at least have tried selling "cheap" Windows 8 tablets as an alternative to the pricy Microsoft product. Fighting over the leftovers is better than nothing at all... But at $199? Why bother even trying?

They should come out at $499 and fight for the 2 or 3 years it will take to get some traction (and it will take that long either way). It is definitely a better product than any of their OEMs can make, so that isn't worth worrying about. Let Android guys fight over the crumbs in the market, Microsoft should focus solely on Apple - that is their only real competitor. They need to try and beat them at their own game for once.

After they have a bit of traction they could take advantage of economies of scale and probably drop the price some. But it is stupid to come out the gate losing money on every sale - it won't work...

Sorry, they are totally screwing up going this route out of the gate...

Reply Score: 1

RE: Dumb Move
by MollyC on Tue 14th Aug 2012 22:28 in reply to "Dumb Move"
MollyC Member since:
2006-07-04

I seriously doubt that this rumor is true.
But one thing I do know is that Microsoft spent orders of magnitude more time and effort on studying different pricing models than the average off-the-top-of-my-head armchair CEO message board anon (like you) has.

Reply Parent Score: 3

RE[2]: Dumb Move
by galvanash on Tue 14th Aug 2012 23:14 in reply to "RE: Dumb Move"
galvanash Member since:
2006-01-25

I seriously doubt that this rumor is true.
But one thing I do know is that Microsoft spent orders of magnitude more time and effort on studying different pricing models than the average off-the-top-of-my-head armchair CEO message board anon (like you) has.


I hope the rumor isn't true - I am actually pulling for them and I think low-balling the price is a big strategic mistake.

As far as the relative value of my opinion... I do know the true value of market research: if you spend and enormous amount of time, money, and effort doing market analysis using all the "right" people and data it buys you exactly one thing - an excuse when everything goes wrong ;)

Tim Cook is a fan of a book called "Competing Against Time". You should read it. It will tell you, among other things, why you should never set prices based on market acceptance research, and especially why you should never set a "low, low introductory price!" on an expensive to manufacturer technology product...

Think whatever you wish of my opinion on the matter...

Reply Parent Score: 2

RE[2]: Dumb Move
by galvanash on Wed 15th Aug 2012 02:43 in reply to "RE: Dumb Move"
galvanash Member since:
2006-01-25

Also...

http://arstechnica.com/information-technology/2012/08/how-microsoft...

There is another armchair CEO who writes for Ars that agrees with me... He isn't anonymous - maybe that will sway you ;)

Seriously though, read this bit - he says it better than I could:

But perhaps the most significant reason of all not to price Surface RT at $199 is that once that decision is made, there's no going back. The price of a 10" Windows RT tablet will be two hundred bucks—or less—forever.

---snipped a bit for brevity---

Tablets are unlikely to be able to buck this trend. While a $199 Surface RT would leave the door open to pricier devices sporting, for example, 13" screens, more internal storage, or 3G connectivity, it still doesn't leave much wriggle-room, and would yield no profit with which to fund future developments.


Bolding is mine...

Reply Parent Score: 1

RE: Dumb Move
by ze_jerkface on Wed 15th Aug 2012 00:46 in reply to "Dumb Move"
ze_jerkface Member since:
2012-06-22

Part of the reason that developers flock to Apple devices is that they are not cheap.


I think you mean vain tech hipsters, not developers.

It's economics that attracts developers, not the consumer price of the platform. We've seen this with game consoles where the cheaper option (ps2 vs xbox) gets more developer support simply because the install bsae is larger.


They should come out at $499 and fight for the 2 or 3 years it will take to get some traction


That would be foolish. Apple can get away with overpricing hardware because it has tricked enough people into believing that the hardware is magically special and not from the same Chinese sweatshops as everything else. Kindle has done the best against the iPad and the $200 price tag is a major part.

Through marketing Apple has convinced millions it is a premium brand. Microsoft's marketing department is terrible and couldn't use the same strategy.

Reply Parent Score: 3

RE[2]: Dumb Move
by galvanash on Wed 15th Aug 2012 03:30 in reply to "RE: Dumb Move"
galvanash Member since:
2006-01-25

I think you mean vain tech hipsters, not developers.

It's economics that attracts developers, not the consumer price of the platform. We've seen this with game consoles where the cheaper option (ps2 vs xbox) gets more developer support simply because the install bsae is larger.


Tablets are not consoles. It matters a whole helluvalot to be cheap when your market demographic is pimple faced kids and twenty somethings...

Consoles are pure home entertainment devices. They don't have to be well crafted, no one cares. They don't have to use good materials - they end up hiding on a shelf in an entertainment center, plastic is perfectly fine. People don't hold them in their hands (well, except for the controllers). They have 5+ year product cycles (current one being much longer) to recover sunk costs through licensing. Business people don't buy them. Executives don't buy them. Doctors don't buy them. Totally different demographic.

If you think Microsoft can market a tablet like a console your crazy. It won't work.

"
They should come out at $499 and fight for the 2 or 3 years it will take to get some traction


That would be foolish. Apple can get away with overpricing hardware because it has tricked enough people into believing that the hardware is magically special and not from the same Chinese sweatshops as everything else. Kindle has done the best against the iPad and the $200 price tag is a major part.
" [/q]

http://paidcontent.org/2012/08/14/new-stats-show-ipad-surging-again...

Yep, Kindle is doing great! They are losing marketshare even with their stellar price point, and they probably have to sell 25 of them to make as much money as Apple makes on a single sale... Brilliant strategy!

Reply Parent Score: 1